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It has been about a month since the last earnings report for Aqua America (WTR - Free Report) . Shares have added about 1.3% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Aqua America due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Aqua America Q2 Earnings Beat Estimates, Revenues Miss

Aqua America Inc. reported second-quarter 2018 earnings per share of 37 cents, beating the Zacks Consensus Estimate by a penny. The reported earnings were 8.8% higher than 34 cents recorded in the year-ago quarter.

The year-over-year earnings growth was due to organic improvement and the new rates in its service territories.Total Revenues

Second-quarter revenues of $211.9 million lagged the Zacks Consensus Estimate of $216 million by 1.9%. However, revenues were up 4.2% year over year. The year-over-year improvement in total revenues was due to infrastructure surcharge and increase in regulated revenues.

Highlights of the Release

The company continues to expand its operation through strategic acquisitions. Year to date, the company signed or closed eight municipal acquisitions, which will add nearly 27,000 customers to its existing customer base. These acquisitions are going to have a positive impact on the performance of the company.

Year to date, Aqua America's state subsidiaries in Indiana, Illinois, New Jersey, North Carolina, Texas, Pennsylvania and Ohio have received rate awards or infrastructure surcharges amounting to $20 million. The company currently has rate proceedings pending in Indiana, North Carolina, Virginia and Ohio worth $8.8 million.

Operation and maintenance expenses increased 5.6% year over year to $73.5 million.

Interest expenses increased 10.7% to $23.7 million from $21.3 million in the year-ago quarter.

Financial Highlights

Current assets were $189.4 million as of Jun 30, 2018, down from $131.3 million on Dec 31, 2017. Long-term debt was $2,181.4 million as of Jun 30, 2018, higher than $2,007.7 million on Dec 31, 2017.

Guidance

Aqua America reiterated its 2018 earnings in the range of $1.37-$1.42 per share. It expects customer base to expand 2-3% in 2018. The company plans to invest $500 million in 2018. This is part of the investment plan of nearly $1.4 billion through 2020.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

VGM Scores

Currently, Aqua America has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for momentum based on our style scores.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Aqua America has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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